The Iranian regime, faced with economic hardship and growing internal ethnic divisions, has entered one of its most difficult periods since the 1979 Islamic Revolution, former Mossad director Meir Dagan said Thursday. Dagan likened Tehran’s current predicament to the darkest hours of the Iran-Iraq War, when Ayatollah Ruhollah Khomeini broke all previous vows and signed a ceasefire agreement with his archrival, Saddam Hussein.

“The situation today is rather similar,” Dagan, who headed the Mossad from 2002 to 2010, said at a conference Thursday at the Institute for National Security Studies in Tel Aviv. “The level of the challenge it faces today is unlike any other moment since the Iran-Iraq War.”

Dagan detailed a July 1988 meeting between the de facto commander of the armed forces of Iran, former president Ali Akbar Hashemi-Rafsanjani, and Ayatollah Khomeini, in which the former — widely viewed as President Hassan Rouhani’s commissar — told the then-supreme leader that the intolerable death toll had pushed the masses to the brink of revolt.

“That’s what made (Khomeini) sign a deal with the devil,” Dagan said.

Dagan’s address at the INSS comes amid the most significant negotiations that Iran has ever held over its nuclear program with the P5+1 world powers, and follows years of overt and covert opposition from Dagan to preemptive Israeli strikes on Iranian nuclear facilities, which Prime Minister Benjamin Netanyahu reportedly sought during Dagan’s years at the helm of the Mossad.

Dagan, who ran the Mossad from 2002-2010, said Thursday that unemployment in Iranian urban areas was at 30-35 percent and equally high — if more difficult to measure — among Ayatollah Khamenei’s base in the more rural areas of the country. “A connection, which didn’t used to exist, has been created between the nuclear project and the economic situation,” Dagan said.

Secondly, the “alliance of comfort” between the Persians and the Azeris in Iran, along with the Kurds and Baluchs, has begun showing ever greater signs of tension, contributing to what Dagan called a window of opportunity in which the Iranians were open to negotiating.

Nonetheless, he said he was concerned about the dynamics of the ongoing talks. Iran, he said, seeks to have sanctions lifted and maintain a nuclear option; the world powers seem inclined to offer “confidence-building measures,” which might include sanction relief, before a final deal is reached, thereby loosening the crucial international pressure on the regime. In delivering this assessment, Dagan — a public foe of Netanyahu’s since leaving office, who has warned repeatedly against a “foolish” premature military intervention by Israel in Iran — echoed the warnings issued by Netanyahu in recent weeks against easing sanctions before Iran moves substantively to dismantle its nuclear program.

Israel would do well to focus its efforts at this time on three things, Dagan said: working on the P5+1 powers’ negotiation tactics, maintaining the vice grip of the sanctions until an agreement is reached, and ensuring that, if an agreement is indeed reached, the level of oversight will be sufficiently stringent.

Finally, he expressed consternation at the US’s willingness to speak with Iran at the highest level without an apology for the 1979 takeover of the US embassy in Tehran and the ensuing hostage situation. Noting that the former president, Mahmoud Ahmadinejad, had given his final address in office from the former embassy’s grounds and that President Barack Obama had not demanded an apology for the regime’s incarceration of dozens of American citizens for more than a year, Dagan said, “We’re in the Middle East. And in the Middle East you need to act differently.”